Strategy Clinic: Finding the optimal IT structure

Can you suggest what an optimal IT structure should be for a medium to large organisation where IT is fairly mission-critical?

Can you suggest what an optimal IT structure should be for a medium to large organisation where IT is fairly mission-critical?

Which is the optimal IT infrastructure?

In the past few years we have moved from a centralised IT infrastructure to a decentralised one, and then back again. Each has brought its own headaches - the IT budget ran away with itself in a decentralised environment, while in a centralised one we had problems with being unable to satisfy our users' expectations. Can anyone suggest what an optimal IT structure should be for a medium to large organisation where IT is fairly mission-critical?

Look for a compromise

Paul Williams

Arthur Andersen

Decentralisation cannot really be avoided in the current business environment. The increasing presence of e-business and added demands of users, customers and business partners mean centralised solutions cannot always respond quickly enough. This has made the whole process of running and managing IT even more complex and is forcing companies to examine seriously how they provide a cost-effective service but still respond quickly and safely to the business demands for change.

The structure that often works well is to maintain the core systems and data in a centralised environment, which could be a mainframe or server cluster, while providing access to this data and enhanced functionality through distributed solutions such as web and application servers or even the newer wireless application protocol servers and the like. This architecture provides a compromise between central control and distributed functionality and is made practical by the essentially limitless network bandwidth companies can now deploy.

However, the key to maintaining control over the distributed portion of the environment, including the desktop is centralised systems management. There are now many proprietary tools available to provide this functionality. These tools and technologies give IT departments the ability to operate as though they have centralised systems even though they have not. These solutions may not be cheap in the short term but they will pay dividends in the longer term once operating effectively, allowing the business to take better and earlier advantage of the commercial and competitive leadership opportunities presented.

Keep control central

Roger Rawlinson

Head of e-business technologies, NCC Group

This is a constant issue. User departments want autonomy and central services want to keep control for ease of support, cost containment and maintenance.

The critical issue is that IT is often decentralised because user departments do not perceive that they are being provided with the service they require. As you describe, decentralisation in this instance can then lead to run-away budgets. It can also lead to divergent IT systems and compliance issues, building up huge problems for the future.

In order to maintain a strategy, I would keep control central, but put in place a user forum, service level agreements and an IT steering committee. Communication is key here and it is important that users have a voice and that the constraints of IT are understood. In addition, make sure there is sufficient resource to deliver to the size of your organisation.

Let conditions determine operation

Dan Remenyi

Brunel University

Alas, there is no optimal IT structure for anyone or any organisation. The fact that you are a medium to large organisation does not mean that you have to run your IT operation in a particular way.

The most effective IT structure depends upon the industry, the firm and its culture. Furthermore you might have noticed that things change and it is not at all uncommon to do what has happen to you, ie move from centralised to decentralised and back again. Sometimes when organisations are trying to promote the rapid acceptance of new technological ideas they deliberately encourage

users to take care of their own needs. At such time decentralisation is probably a very useful policy as it can speed up the application of new technology. Once the technology is in place then some control is often necessary and the organisation may wish to move towards a more centralised way of managing the technology.

This swing from centralised to decentralised and back again is a well-established approach and can actually be very healthy. So cheer up and enjoy managing your IT function with whatever structure is appropriate at the time.

Get close to your customers

Roger Marshall


All that change in a few years sounds like a bad thing in itself and after all the upheaval you are still not satisfied with the outcome. Your problem seems to centre on resources and budgets, rather than the usual issue in this never-ending debate, which is corporate standards versus local autonomy.

When you were decentralised the overall spend was a problem, but have you asked whether the spending was justified, whether the business was getting value for money? If it was, then what was the problem apart from a failure to recognise and appreciate the benefits of IT investments?

When you re-centralised you were unable to satisfy user expectations. Presumably, those out-of-control budgets were cut when you re-centralised.

Whether they were or not, the implication is that you actually needed additional resources to invest adequately in IT.

Perhaps what is being masked here is a lack of trust in the IT function in your company. IT is not satisfying users because it is not managing their expectations, it is not getting the resources needed because users are dissatisfied and what resources it does get are being wasting on repeated reorganisations.

Worrying about the ideal structure for IT is a waste of time. There is no formula. But getting closer to your customers might make all the difference.

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